Lord Lipsey: My Lords, I declare an interest as unpaid president of the Society of Later Life Advisers.
Today I will concentrate on the cap. It was first proposed in my minority report to the 1999 commission on long-term care and carried forward in the Dilnot report a decade later. Noble Lords might be expecting me to be dancing in the aisles because this long-awaited proposal is now being bought in. Well, dancing I ain’t, and nor should older people who have been deluded into thinking that their care costs and worries are over. Bluntly, this cap is a fraud perpetrated against the elderly and against their children, and one which will not deliver but will come back to haunt its progenitors.
Many elderly people will not benefit from the cap at all. Nearly half get their care for free under the means test. Of the rest, many will not qualify because they do not meet tough requirements for proving that they need care, under which substantial disability must be shown. Even if you jump those hurdles, will you get that help? Will you get back the £86,000 you have coughed up for care? No, because the £86,000 is a purely notional figure which, when analysed, turns out to be nothing like the truth. You can claim only as much as a local authority would pay if it were booking a care home place itself, so for a nursing home, the limit would be £779 per week. Yet self-funders pay much more than local authorities that place people—£1,139 per week according to the true expert, Graham Duffy, from Just. There is a gap of £360, which you will have to fill yourself since the cap does not help you. From what you can get help with, you must then deduct what are rather insultingly called hotel costs—that is, accommodation—of perhaps £200 per week. You may well get a nursing care allowance of £187 per week. That great deduction comes off what you will get back.
You are spending roughly £1,100 per week on your care, but only about £400 of that can count towards the cap. When will you start getting some cash? On my calculation, it will take about five years at £400 a week to get you somewhere near £80,000. However, the clock does not even start to tick until October 2023. Anything you pay out before then must come out of your own pocket. Therefore, in practice it will be at least seven years before anyone benefits by a penny from this cap—two years until the scheme is launched, and then five years to reach the £86,000. Here is the rub: the average person in residential care lives only for about another five years. There is a tail of robust and fortunate people who go on for a very long time. They might get some help from the cap, but if as many as one in 10 care home residents benefits from this cap, I will be extremely surprised. Also, as I said earlier, even those who benefit will not get back the money they have paid out. Under the cap, they will get back about a third of it.
Putting my cards on the table, I do not object to the few people benefiting greatly from the cap. After all, the beneficiaries are generally the better-off, who do not have to sell their homes to pay for care because they can borrow from the local authority, and the true beneficiaries are not the old people themselves but their kids, who presently get large and largely unearned windfalls. It is not the lack of generosity of the Government’s scheme that appals me but its opacity—not understandable even by those with great knowledge in this field who have studied it for hours.
I am sorry to blow my own trumpet, but my minority report proposed a very much simpler scheme whereby you must pay for five years of your own care and then you get it all free. That way, you do not have to keep tabs all along on how much somebody is spending. It has the advantage of being purely a chronological qualification. Instead, we have this monstrously complex scheme that is designed for one purpose only: to con the public that the care costs problem has been fixed. It is a cap, yes, but a cap that simple is not worth the palaver.